E-tolls run out of gas
STRUGGLE: SANRAL IS LOSING THE FIGHT TO COLLECT MONEY OWED
Government urged to come up with acceptable roads funding mechanism.
An exhausted Sanral has almost reached the end of the road with e-tolls, admitting it has all but lost the revenue battle, with just a third of the money owed being paid by motorists.
It believes government needs to come up with an acceptable roads funding mechanism.
They will even accept a fuel levy, something they have always vigorously opposed.
All they want to do is have enough money to build and maintain roads.
Gauteng Freeway Improvement Project (GFIP) manager Alex van Niekerk said the e-toll situation was “not in a favourable state at the moment”.
He added Sanral required “clear direction in funding policies”.
“Whatever government indicates to Sanral on which funding model should be used, it will be implemented,” he said.
With the experience of nonpayment as a background, Van Niekerk admitted that “fiscus funding” from government would be “the best situation” for Sanral, but this wasn’t viable.
“National Treasury was also very clear in the lead-up to this project that they don’t have the funds.
“They have sufficient money to maintain it. We will always be able to maintain it but in terms of implementing these massive projects. We need huge capital up front.
“The other option is to do nothing. We will keep on maintaining what is there and the congestion will build up. We are not an agency. We are an SOE [state-owned entity] level 3 so we are not making any profit.
“For us, it’s not about the tolling. It’s about being able to generate the revenue to enable us to build mega projects which will enable economic growth.”
Sanral spokesperson Vusi Mona said the organisation was tired of being berated.
“Sanral is an engineering outfit and not the custodians of public funding. The government, Treasury and citizens must agree that if we want this infrastructure, how will we pay for it? That shouldn’t be a discussion for engineers. “We are not on a tolling crusade. If our citizens can give us a pot of money to build without tolling, we will welcome that. ” Mona said that he would “love to see, for instance, the implementation of a fuel levy”. “But please explain how you are going to get all the other provinces to agree they are going to pay for roads in Gauteng?” Both Mona and Van Niekerk pointed out that there was presently not enough money for improving roads infrastructure.
About R40 billion was needed for priority projects but Sanral got an annual allocation of just R15 billion from the fiscus.
A further R150 billion was needed for future projects, said Van Niekerk.
“I know the argument is to get rid of corruption, then the money will be there. But that is not something for Sanral to address,” Van Niekerk said.
Sanral’s chief financial officer, Inge Mulder, said a future overall strategy for the country’s roads, called Horizon 2030, was something the transport minister would take to parliament.
“But it’s a 2030 view ... and it’s a strategy more than it is a funding proposal,” said Mulder. –
E-tolls are not in a favourable state at the moment.
For us, we want to be at a stable state. We need about R200 to R230 million a month … we are not in a favourable situation at this stage. Alex van Niekerk GFIP project manager for Sanral Watch the video online citizen.co.za
‘The glass at the moment is three quarters full and there are 50 other demands.’
In the euphoria of the World Cup in 2010, everybody thought the great new highways were part of the building programme for the tournament, just like the stadiums. Nobody asked then who would pay for these wonderful new freeways.
But when the realisation sank in that the Gauteng Freeway Improvement Project (GFIP) would be financed by e-tolls, millions of motorists refused to pay, which has almost brought the SA National Roads Agency (Sanral) to its knees financially.
Four years down the line, Sanral explains what it has gone through in trying to maintain and create new road infrastructure in order to bring in economic investment.
And according to the stateowned entity (SOE), this has not been easy. There is no money, and their mandate needs to be met.
The Citizen brings you up to date on the contentious e-tolling issue that some may deem to have sparked the revolution against government we see today.
FUNDING
Sanral says it is stuck between a rock and a hard place, with a mandate to build roads but without enough funding from government, which means it has to go to lenders to be able to produce world-class infrastructure, which will, in turn, strengthen the economy.
At its Central Operations Centre in Midrand, its GFIP project manager Alex van Niekerk says the national funding glass is far from full,
“That glass at the moment is three quarters full and there are 50 other demands that are maybe more crucial for government.”
Sanral therefore requires clear direction in funding policies, he said.
The entity’s chief financial office Inge Mulder agrees.
“That roads funding policy is fairly crucial,” she said adding that it would factor everything into account, on priority funding from the budget and other mechanisms.
Sanral spokesperson Vusi Mona points to an idealistic view of “just getting the money”, without the hassle.
“Ideally for us, we would want to plan the road and say to government here is the plan. If you want to meet your mobility objectives and your economic objectives, this is the road infrastructure that you need, it’s going to cost so much, and walk away.
“If it’s got to be funded by citizens, citizens must see the plan and how much it costs, and must like the infrastructure – but then we must get to the next question.
“If we want this nice freeway, how are we going to pay for it? Is it going to be through tolling, or through the fiscus which may have implications on taxation. That shouldn’t be a discussion for engineers.
“We are not on a tolling crusade. If citizens in South Africa can give us a pot of money to build without tolling we will welcome that. The money has to come from somewhere.”
About R40 billion is needed for priority projects Sanral needs executing with and annual allocation of just R15 billion from the fiscus.
A further R150 billion is needed for future projects, says Van Niekerk, adding that Treasury has a hard task on its hands in providing basic needs versus fancy freeways for those who own a vehicle.
A tax versus a user charge was also a redistribution of wealth, with the poorer suffering more from being taxed, Van Niekerk says.
“The advantage of a user pay, is you just pay a user charge when you use it.”
Fiscus funding from government would be the best situation for Sanral, he said.
SANRAL’S WOES
Van Niekerk says: “There is unfortunately sometimes the view that if we can get tolling not to succeed then we win, but what we are winning?
“We are winning that a potential funding mechanism is not there anymore and wasn’t there for the past six years because of ‘political issues’ and public issues.”
“That is the impact of not having a funding model.”
He said the Act governing Sanral allows “two main funding schemes”. “One is that we get a contribution from government and the fiscus. Sanral can also approach the capital markets and the issuing of bonds.”
Sanral does not make policy, it merely implements it, he adds.
National Treasury was also clear that they didn’t have the funds.
“They have sufficient money to maintain it, but in terms of implementing these massive projects we need huge capital upfront.
“The other option is to say, we don’t do anything. We will keep on maintaining what is there and the congestion will build up.”
To build a new freeway, Van Niekerk says, it is estimated to cost anything between R100 million and at R150 million per kilometre. That includes buying the land needed to build on.